Mariano Rajoy has said that he is "absolutely convinced" that Spain will
not need any more funds to prop-up its ailing banking sector, as he urged
Germany and other stronger eurozone nations to do more to boost growth in
the region.

Spain's government has so far resisted a bail-out request because of the harsh conditions that are a pre-requisite for the central bank to consider bond purchases.

Spain's prime minister dismissed doubts over the current health of Spanish lenders, and argued that the country's banks had already revealed the extent of their troubles in a “complete striptease” of the sector. “I am absolutely convinced that Spanish financial institutions will not require any more funds than were given already,” he told the Financial Times.

Mr Rajoy described a "need for growth" in the 17-nation bloc, and called for Germany and other creditor nations to lead the way. "Those who are able to implement growth policies should do it,” he said.

“What is clear is that you cannot ask Spain to adopt expansionary policies at this time. But those countries that can, should.”

He also defended the government's decision not to request help from the European Central Bank (ECB) via its Outright Monetary Transactions (OMT) programme. “People might say that I wasn’t right by not entering the OMT. I am not really bothered by that (...) We took a decision that was right for Spain.”

The ECB's bond-buying plan, unveiled by president Mario Draghi in September, is aimed at easing the eurozone's debt crisis through unlimited purchases of short term debt. However, Spain's government has so far resisted a bail-out request because of the harsh conditions that are a pre-requisite for the central bank to consider bond purchases.

Mr Rajoy's conservative Popular party has faced growing criticism and a wave of general strikes over its handling of the economy. Last March, the country unveiled its most austere budget in democratic historyin an attempt to slash its budget deficit.

The unemployment rate in Spain, at 26.6pc, is the highest in the industrialised world, and is predicted to soar to almost 27pc this year, according to the Organisation for Economic Co-operation and Development (OECD).

Mr Rajoy acknowledged that unemployment remained Spain’s “most important problem”, but insisted that the economy had turned a corner.

“Recent job losses have taken place in the real estate sector, in the financial sector and in the public sector,” he says. “But in other sectors of the economy jobs have not been lost. So the labour reform has started to bear fruit,” he told the FT.

“2014 will be a year of economic growth and growth in jobs, and the second half of 2013 will also be a bit better, as long as there are no turbulences in the financial markets.”

Mr Rajoy also said that he was willing to discuss a new financial compact between Madrid and the autonomous regions, including Catalonia, where there has been a surge in separatist sentiment, although he repeated his warning that the government would not tolerate a move towards Catalan secession.

“The unity of Spain goes back more than five centuries. This is the oldest country in Europe,” he said.